After Holl-ister insisted for months that San Benito Foods owed
$1.4 million, city leaders now say the figure is highly inflated
and they hope to settle on a fair amount in the coming weeks.
After Holl-ister insisted for months that San Benito Foods owed $1.4 million, city leaders now say the figure is highly inflated and they hope to settle on a fair amount in the coming weeks.
City officials Thursday confirmed the figure pursued by former City Manager Dale Shaddox was largely inaccurate, and that the two sides are close to reaching an agreement on a lower figure.
Interim City Manager Clint Quilter declined to say how off base the $1.4 million projection was. But he expects to reach a settlement and receive a check by mid-July when the council adopts the city budget, he said.
City Attorney Elaine Cass has been working with city officials and cannery management in the past few months to settle on a figure for the cannery. The two sides have done a “forensic accounting” of past invoices, she said.
San Benito Foods has owned the city’s last remaining canning operation since 1977; the cannery was built in 1915. The company’s tomato canning season lasts 10-12 weeks during the summer, when it uses the city’s industrial sewer plant to dispose its waste. Each year Hollister bills the company for those costs.
But the cost to run the industrial plant jumped after Hollister also started using its ponds in 1999 – and upgraded equipment there – to offset the domestic plant’s capacity problems caused by the city’s rapid growth. Quilter on Thursday acknowledged Hollister’s use of the industrial plant “complicated things.”
The cannery’s bills increased along with the plant’s cost hikes. So cannery management disputed invoices from 1999-2002 – and refused to pay them – claiming Hollister wasn’t paying its fair share.
Shaddox exposed the debt in July 2003, two months on the job, when examining the city budget. After he said the city scrutinized all invoices from 1999-2002, he stood behind an initial projection of $1.6 million that officials eventually whittled to a final demand for $1.4 million. San Benito Foods management and Bill Scott, vice president of the cannery’s parent company, Neil Jones Food Company, did not return phone calls Thursday.
Cass was out of the office Thursday, though, and from her home she also couldn’t provide an estimate of the reduced amount.
“I don’t think there should be any problem with San Benito Foods paying its bill,” Cass said.
“Some of the capital improvements are the city’s responsibility because they relate to the city’s use of the industrial plant,” Cass said.
If the two sides do reach an agreement, it would end almost a year of debate between city officials and cannery management. San Benito Foods also recently gave Hollister a check for nearly $300,000 to cover the 2003 canning season, officials said.
“I don’t think it’s healthy for the community or cannery to be in a situation where neither one knows what the right figure is,” City Councilman Tony LoBue said.
Councilman Robert Scattini, known for keeping a close eye on spending, said uncertainty over the bills illustrated the historic mismanagement of Hollister’s finances.
Former Utility Manager Jim Perrine, who resigned last July, oversaw the city’s relationship with San Benito Foods. Former City Manager George Lewis, Finance Director Barbara Mulholland and Quilter also had known about the billing dispute before Shaddox arrived, officials have said.
“Somebody was not watching the farm. They were asleep at the switch,” Scattini said. “I hope to see this stuff is corrected. What we need to do is be accurate and pay attention to business.”
